Updated October 16, 2026. Quick answer: Box 10 of Schedule K-1 (Form 1120-S) holds a shareholder’s other income, gain or loss that has no box of its own, and each lettered code goes to a different place on the return. The instructions add a warning: “Losses reported in box 10 may be limited.” Casualty items go to Form 4684, section 1256 contracts to Form 6781 and capital gain items to Schedule D, so read the code letter first.
What box 10 reports
On the form, line 10 of Part III is labelled “Other income (loss)”. Each item is identified by a code, and the instructions treat each code on its own. This page covers the shareholder’s side of a K-1 you received, not how the corporation files its own return. Every other box is set out on the Schedule K-1 (Form 1120-S) boxes overview.
Code A is the portfolio income code. “Portfolio income or loss (shown in boxes 4 through 8b and in box 10, code A) isn’t subject to the passive activity limitations.”
“In boxes 10, 12, 13, and 15 through 17, the corporation will identify each item by entering a code in the column to the left of the dollar amount entry space.”
Every box 10 code and where it goes
The table follows the instructions code by code. Where a code only says the corporation will provide a statement, the statement is the source for the reporting figures. The codes marked reserved carry no instruction.
| Code | What it is, as printed | Where it goes |
|---|---|---|
| A | “The corporation will report portfolio income other than interest, ordinary dividend, royalty, and capital gain (loss) income, and attach a statement to tell you what kind of portfolio income is reported.” | The attached statement tells you what kind of portfolio income is reported. If the corporation held a residual interest in a real estate mortgage investment conduit (REMIC), the statement reports your share of REMIC taxable income (net loss), which you report in column (d) of Schedule E (Form 1040), line 38. It also reports any excess inclusion for column (c) and section 212 expenses for column (e) of that line. |
| B | “This is your net loss from involuntary conversions due to casualty or theft.” | “columns (b)(i), (b)(ii), and (c) of Form 4684, Casualties and Thefts, line 34” |
| C | “The corporation will report any net gain or loss from section 1256 contracts.” | “Report this amount on Form 6781, Gains and Losses From Section 1256 Contracts and Straddles.” |
| D | “The corporation will give you a statement that shows the information needed to recapture certain mining exploration costs (section 617).” | The statement the corporation provides |
| E | “this is your share of the corporation’s global intangible low-taxed income (GILTI) amount” | “Report this amount on Schedule 1 (Form 1040), Additional Income and Adjustments to Income, line 8o, or the comparable line of your income tax return” |
| F | “The corporation will provide your share of its section 951(a)(1)(A) inclusions.” | “Report this amount on your Form 1040, Form 1040-SR, or relevant income tax return.” |
| G | “The corporation will provide your share of its section 951(a)(1)(B) inclusions.” | “Report this amount on your Form 1040, Form 1040-SR, or relevant income tax return.” |
| H, L, P to R, T to X | “Code H. Reserved for future use.” “Code L. Reserved for future use.” “Codes P through R. Reserved for future use.” “Codes T through X. Reserved for future use.” | No entry |
| I | “Gain (loss) from disposition of oil, gas, geothermal, or other mineral properties” | “Report a loss in Part I of Form 4797. Report a gain in Part III of Form 4797 in accordance with the instructions for line 28.” |
| J | “A tax benefit item is an amount you deducted in a prior tax year that reduced your income tax.” | “Report income from recoveries of tax benefit items on Schedule 1 (Form 1040), line 8z, to the extent it reduced your tax in the prior year.” |
| K | “Gambling gains and losses.” | Depends on whether the corporation was in the business of gambling; see below |
| M | “Gain eligible for section 1045 rollover (replacement stock purchased by the corporation)” | “See Form 8949, Sales and Other Dispositions of Capital Assets, Schedule D (Form 1040), and the related instructions for details on how to report the gain and the amount of the allowable postponed gain.” |
| N | “Gain eligible for section 1045 rollover (replacement stock not purchased by the corporation)” | “You must purchase other QSB stock” within the stated window; see below |
| O | “Sale or exchange of QSB stock with section 1202 exclusion.” | “See Form 8949, Schedule D (Form 1040), and the related instructions for details on how to report the gain and the amount of the allowable exclusion.” |
| S | “Non-portfolio capital gain (loss).” | “Report total net short-term gain (loss) on Schedule D (Form 1040), line 5. Report the total net long-term gain (loss) on Schedule D (Form 1040), line 12.” |
| ZZ | “The corporation should give you a description and the amount of your share for each of these items.” | “Report loss items that are passive activity amounts to you following the Instructions for Form 8582.” |
Codes E, F and G: foreign inclusions
These codes depend on a corporate election. “This information will be provided in box 10 using code E only if the corporation (and its shareholders, if applicable) had elected to be treated as an entity for purposes of section 951A”. “If no election had been made under the proposed regulations, see the instructions for Part V of Schedule K-3 (Form 1120-S)”.
Code K: gambling gains and losses
The treatment turns on one fact. “If the corporation wasn’t engaged in the trade or business of gambling, (a) enter gambling winnings on Schedule 1 (Form 1040), line 8b; and (b) deduct gambling losses to the extent of winnings on Schedule A (Form 1040), Itemized Deductions, line 16.”
The other case: “If the corporation was engaged in the trade or business of gambling, (a) enter gambling winnings in column (k) of Schedule E (Form 1040), line 28; and (b) deduct gambling losses (to the extent of winnings) in column (i) of Schedule E (Form 1040), line 28.” Schedule E is explained on the Schedule E page.
Codes M, N and O: small business stock
Code M and code N concern the section 1045 rollover. For M, “You must have held an interest in the corporation during the entire period in which the corporation held the QSB stock (more than 6 months prior to the sale)”. “Your share of the gain eligible for the section 1045 rollover can’t exceed the amount that would have been allocated to you based on your interest in the corporation at the time the QSB stock was acquired”.
Code N adds a purchase test: “You must purchase other QSB stock (as defined in the Instructions for Schedule D (Form 1040)) during the 60-day period that began on the date the QSB stock was sold by the corporation.”
Code O covers the section 1202 exclusion. “You must have held an interest in the corporation when the corporation acquired the QSB stock and at all times thereafter until the corporation disposed of the QSB stock.”
Gain from codes M, N and O is reported through Form 8949 and Schedule D, following the instructions quoted in the table.
Codes I and S: dispositions and capital gain
Code S is the capital gain code. “An example is gain or loss from the disposition of nondepreciable personal property used in a trade or business activity of the corporation.”
Code I has a calculation. “You must figure your gain or loss from the disposition by increasing your share of the adjusted basis by the intangible drilling costs, development costs, or mine exploration costs for the property that you capitalized”. The result goes to Form 4797 as the table shows.
The limits that apply before a box 10 loss reaches the return
The instructions list four limits and put them in a fixed order: “These limitations and the order in which you must apply them are as follows: the basis limitations, the at-risk limitations, the passive activity limitations, and the excess business loss limitations.” The amounts printed in Part III are before any of them. “The amounts shown in boxes 1 through 17 reflect your share of income, loss, deductions, credits, and other items from corporate business or rental activities without reference to limitations on losses, credits, or other items”.
For the at-risk step, “you will have to complete Form 6198, At-Risk Limitations, to figure your allowable loss for the activity.” Form 6198 is covered on the Form 6198 page.
Passive losses are figured on their own form. “If you have a passive activity loss or credit, use Form 8582, Passive Activity Loss Limitations, to figure your allowable passive losses”. The form is covered on the Form 8582 page.
Which revision applies
The edition read for this page is the 2025 Shareholder’s Instructions for Schedule K-1 (Form 1120-S) and the 2025 Schedule K-1 (Form 1120-S) itself, which are the revisions irs.gov served when they were read on 2026-10-16. Check the revision printed on the Schedule K-1 you received and the matching instructions, because a later edition can change the box layout, the code letters and the reporting lines.
Common mistakes
- Posting every box 10 amount to one line. The instructions send code B to Form 4684, code C to Form 6781, code J to Schedule 1 line 8z and code S to Schedule D, so the code letter decides the form.
- Treating gambling the same in every S corporation. The instructions split code K on whether the corporation was engaged in the trade or business of gambling, with different lines for winnings and losses in each case.
- Ignoring the attached statement. For codes A, B and D the instructions say the corporation gives a statement with the figures, and the K-1 box alone does not carry them.
Related: Form 4797 sales of business property, Schedule D (Form 1040), Form 8949 sales of capital assets, Schedule E (Form 1040), and Form 8582 passive activity losses.
Sources
- 2025 Shareholder’s Instructions for Schedule K-1 (Form 1120-S): https://www.irs.gov/pub/irs-pdf/i1120ssk.pdf
- Schedule K-1 (Form 1120-S) (2025), Shareholder’s Share of Income, Deductions, Credits, etc.: https://www.irs.gov/pub/irs-pdf/f1120ssk.pdf
Read from the IRS documents linked above on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.